Wednesday, January 13, 2016

Dennis Daugaard, Road Warrior

Geronimo!!!!Gov. Daugaard Shows Some Moxie(photo from usatoday.com)

Agree with him or not, you have to be impressed by SD Governor Dennis Daugaard's ascension into statesmanship with yesterday's State of the State speech. His epiphany regarding teacher salaries and Medicaid expansion was clear, stark and unequivocal. Throw in politicallycourageous and you have the makings of a governor who just might go down as one of the more transformative leaders in this state's history. Daugaard's acknowledgement of the shabby salary schedule applied to South Dakota's teachers is something we've known since he appointed a task force to study it last year. It's his understanding of the role that state government has to play in the situation that has the marks of enlightenment. Just two years ago he was telling the Sioux Falls Argus Leader"the state doesn't control teacher pay. To point the finger at the state and say you are the problem here, it just, it's not accurate. If school districts want to spend more money for teacher pay that's what they can do."I found his dismissal of responsibility to be a glaring lack of understanding that quality educators are a major component of our state's infrastructure and challenged him to turn our public schools into the asset that they need to be. I'm glad that I was a part of the noise that finally captured his attention, with the results so clearly elucidated in yesterday's speech. His plan for funding the 20% increase in teacher salaries this year--a half-cent hike in sales taxes--is not my favorite, but for now it's probably the most politically practical and expedient. Selling the tax hike as a dedicated revenue stream that goes to teacher salaries seems like a pitch that has a decent chance of success. I believe more efficient results could be obtained by overhauling our sales tax code's list of exemptions, which total nearly $1 billion a year. That would be a more productive way of generating the $80 million or so needed to fund the new teacher pay scale, especially as its aims would be at special interest groups, not the general public. But that can wait. Let's get Daugaard's immediate approach done now and talk sales tax reform later.Medicaid expansion isn't quite so abrupt a turnaround in Daugaard's thinking. A year ago he was carefully noting to WNAX radiothat the subject was under discussion, though at the time WNAX said that Daugaard "was generally opposed to expansion," which I think was the overall sense that most of us got. Still, as Daugaard has noted, he never said "never," which was a good calculation on his part, considering that Medicaid expansion has plenty of healthcare and fiscal benefits attached to it--points that Daugaard made with clarity and passion in yesterday's speech. I especially admired the precautions that he took when explaining the financial risks, assuming nothing in the way of broad fiscal gains by the infusion of a couple of billion dollars into the state's economy over the course of the next few years. Though many have argued that the economic gains are abundant, Daugaard prudently ignores them as he presents the plan, which appears to be workable even if those gains never accrue. Daugaard also made it clear that withdrawing from the plan if Obamacare--which spawned the Medicaid expansion opportunity in the first place--is repealed would basically just put us back to the status quo. Giving Medicaid expansion a try is not an irreversible decision. Opponents and their scare tacticsaren't making much sense, though I have no doubt they'll be fighting this one hard during the session. My take is that facts and what I believe is the strong support of the healthcare community in the state will overwhelm them. We're talking serious money to be left on the table if we don't go with this.

I think both initiatives have a good chance of succeeding, especially if South Dakotans can mobilize some grass roots efforts at getting their support across to our legislators. No doubt Daugaard probably has just about every Democrat in the state supporting him. I'm confident a reasonable share of my fellow Republicans--who understand that wise investing leads to substantial returns--can see the economic gains that we'll derive from a world-class cadre of teachers and a gush of federal money coming into the state via Medicaid. That our kids will continue to get great educations and that tens of thousands (around 50k per Daugaard's estimate) of South Dakotans will get easier access to good healthcare make these deals too tempting to ignore.

About Me

I'm a businessman and writer living in the Black Hills of South Dakota. I've written articles and commentary for 25+ years. I was a member of the Chicago Board Options Exchange and the founder of a futures brokerage firm for a total of twenty years and I own commercial real estate in western South Dakota. I served three years ('66-'69) in the U.S. Marine Corps, including a 13-month tour of duty in Vietnam as a radioman. My wife and I have two grown daughters. We make our home in Rapid City, South Dakota